Finkel Review: A vital next step in the national energy debate

The Chief Scientist, Alan Finkel has delivered the first comprehensive review into Australia’s energy market says the Property Council of Australia.

“This report isn’t light reading but it is compulsory reading – and it will take some time for industry to digest the full implications of the report”, said Ken Morrison, Chief Executive of the Property Council of Australia.

“No one, least of all governments and oppositions, should rush to rule in or rule out anything in relation to the Review. It is credible enough to warrant thoughtful discussion and review.

“For too long, there has been too much virtue signalling and not enough policy grunt in the energy policy space. This Review answers that.

“This is a credible and substantive blueprint for energy policy in Australia.

“The Australian electricity market and the economy have suffered because we have had no national consensus on energy policy. Continual uncertainty, ongoing partisanship, and an unwillingness of federal and state governments to mesh energy and climate change policies has increased costs, undermined investment, and increased risk.

“All of this has occurred during a time of tremendous change as renewable energy has grown, baseload power has been withdrawn, technology has changed, as has consumer demand.

“It has also been a time of unsettled policy and investors have stayed clear of investing in assets with long lead times given the potential for further energy policy changes.

“Energy policy has become the policy and political ‘Gordian knot’ of Australian politics and this report marks a major step towards undoing this knot.”

Morrison said the Chief Scientist has proposed the development of a national economy-wide emissions reduction trajectory towards 2050.

“We recognise the opportunities that exist in the built environment to provide real efficiencies to the energy market and to help meet our Paris commitments, and we will study the recommendations of the Review to assess their effectiveness, cost and effect on the industry and the broader economy.

Morrison said the Finkel Review recognised that much more needed to be done to deliver programmes that could drive energy efficiency. Pleasingly, the Review says:

“Despite these existing programs, a large number of submissions called for more to be done on energy efficiency and there appears to be considerable scope for greater use of energy efficiency to improve reliability, security and affordability.” (pg 155)

“We agree that the focus of government has been too narrow when it has come to driving energy efficiency. There are opportunities to drive energy efficiency across the built environment.

Morrison said there is a compelling need for partisanship to be put aside in this debate given recent dramatic increases in electricity prices which are a direct consequence of an underinvestment in the sector and a lack of co-ordination and certainty in energy policy.

“Doing nothing is not a cost-free option. We must change the trajectory of energy policy in Australia, otherwise we will continue to see increased costs, low levels of investment and increasing reliability risks.”

“We will now consult with members across the industry as we develop our response to government on this Review.”